Applying for Amex - But Need Auto Loan. Advice?

Applying for Amex - But Need Auto Loan. Advice?

Hello,

I have a relatively short credit history. Age of my accounts is about 2 and a half years. Started off with a share secure loan, and then received a pre-approved offer from Capital One with a limit of $500. Since then, my limit has increased to $1,250 and I've had a FICO credit score of 743 and 748. It's been decreased to 720, which I assume is from carrying a high balance for the last two months (which now has been paid off completely) and a recent hard inquiry from AT&T when opening up a new line.

I'd like to improve my credit portfolio, and the AMEX card sure is enticing - but I'm in the need of a vehicle, so I will be shopping for auto loans as well. My question is two-fold, and I understand it may be impossible to get specific answers - but some general ideas would be appreciated. So here goes:

1. Now that my balance has been paid off, will I see my FICO score go from 720 (last reported 1/8/14) back up to where it was before the following month?2. Will the hit from applying for AMEX be significant enough to reduce any kind of rates I may otherwise get once I start shopping for auto loans?

I appreciate the feedback everyone. Thank you so much, and I'm definitely loving this forum.

Re: Applying for Amex - But Need Auto Loan. Advice?

WolvenASE wrote:

Hello,

I have a relatively short credit history. Age of my accounts is about 2 and a half years. Started off with a share secure loan, and then received a pre-approved offer from Capital One with a limit of $500. Since then, my limit has increased to $1,250 and I've had a FICO credit score of 743 and 748. It's been decreased to 720, which I assume is from carrying a high balance for the last two months (which now has been paid off completely) and a recent hard inquiry from AT&T when opening up a new line.

I'd like to improve my credit portfolio, and the AMEX card sure is enticing - but I'm in the need of a vehicle, so I will be shopping for auto loans as well. My question is two-fold, and I understand it may be impossible to get specific answers - but some general ideas would be appreciated. So here goes:

1. Now that my balance has been paid off, will I see my FICO score go from 720 (last reported 1/8/14) back up to where it was before the following month?2. Will the hit from applying for AMEX be significant enough to reduce any kind of rates I may otherwise get once I start shopping for auto loans?

I appreciate the feedback everyone. Thank you so much, and I'm definitely loving this forum.

1. You should see a marginal increase now that your balance has been paid off.2. Yes and no. It depends entirely upon the analyst or underwriter. It could mean a denial, it could mean you miss out on a better APR. Who knows? Why chance it?

I'd definitely handle the auto loan first. That's much more pressing than an AmEx card. The AmEx card won't take you to work and back. Well, I mean it could.. but you know what I mean!

You established your credit history with a loan, you've been making payments on your credit card (on time), and you've got a decent AAoA. That's all auto financing agencies care about (minus derogs of course). Honestly, getting the AmEx card isn't going to do much for you aside from adding another TL. Mind you, it'd be a new TL, so there'd be no history to show how you've been managing it. It'd just show an analyst that you opened a new line of credit before asking (applying) for another line of credit.

If you can take the INQ's, I'd close the deal on the auto loan and then hit AmEx. Same day, next day, labor day, whatever. Totally up to you. What matters is getting a better deal on the loan first.

In any case, I wish you the best. A new car and a new AmEx card - awesome!

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.